A “wrap-around” shoe construction having a generally horizontal seam that joins the upper and bottom. The sole includes separate heel and forefoot sole portions that expose the “wrap-around” upper. The horizontal seam preferably extends substantially parallel to the bottom line of the foot. The horizontal seam includes an outwardly-turned moc stitch in the forefoot and heel regions, and an inwardly turned butt stitch in the arch region. The present invention also provides a method for manufacturing an article of footwear including the steps of (1) forming the upper, (2) forming the bottom, (3) stitching the bottom to the upper along a horizontal seam, (5) lasting the upper and bottom assembly, (6) setting the shape of the upper and bottom assembly, (7) forming the outsole from separate forefoot and heel portions, and (8) installing a molded insole and a footbed in the shoe.